Tuesday, December 31, 2013

I have just read of an interesting case that Landlord Action are looking to fight where a landlord and tenant have an specified rent to be paid in Bitcoins drawn up on their tenancy agreement.

The virtual currency seemed to suit the pair of IT whizzes to begin with. However, the rocketing of the value of the currency has caused the situation to sour. The tenant stopped paying earlier this year and demanded that the tenancy agreement be altered. Unsurprisingly the landlord wasn't so keen and is now wanting the massive rental arrears caused by the currency's super inflation to be cleared.

Monday, December 30, 2013

Hometrack statistics report an average increase in property prices across the UK in 2013 was 4.4 percent. The highest rising region was London at 9.1 percent, the worst performing was Tyne and Wear, falling by 1.5 percent over the year.

Private sector landlords have been out-scrooged this year by their public sector counter parts.

Thames Valley Housing Association sent workmen to remove sixteen wreaths from flats in West Ewell for Fire Safety reasons.

A spokesperson for the housing association commented - ‘Our main concern has always got to be the safety of our residents. We can see why this situation may seem ridiculous to our residents but we don’t allow anything to be left in the access area of our flats. We’re following advice from the fire brigade that this is the best way to make sure the area is free of material that can start or worsen a fire, give off poisonous gases or block people’s escape route. We worked with resident groups to agree this as the best approach to keeping everyone safe.'

Just to add to the festive cheer the housing association demanded £10 from tenants wishing for their wreaths to be returned.

Conditions right for expansion?
It looks on the face of it that the economy is once again starting to grow. A growing economy in theory means rising living standards, which means that people have more to spend on things including property. However, we have a problem here. As the economy starts to grow, the government will start reigning in the loose monetary policy and interest rates will rise. This for most people will make property prices less affordable. I've said before that the government has helped us all avoid the biggest property crash of all time (through monetary cloak and mirrors). But don't be fooled ......we have had and will have for a considerable number of years the hissing sound of a deflating property bubble. There is no getting away from it house prices aren't cheap which is one reason why I'm not rushing to expand my portfolio.

Gung ho & ambitious landlords
That is not to say that there are not opportunities out in the investment property market. Auctions always through up anomilies and opportunities. The reality is that if you are patient and look at the long-term then when faced with alternatives residential investment still makes sense even if in my book isn't a screaming buy on capital valuation. The government has done a good job of breathing life back into the market but don't rely on governments to be the judge of good value in the property market (look at the number of booms and busts they have presided over as evidence of this).

What am I doing?
If I was a young ambitious landlord I would be doing exactly what I did before hunting out ways of gearing up my finances for the New Year. As it is I'm happy to drip feed my cashflow into partly paying down my debt and investing in effectively tax efficient private equity called Venture Capital Trusts. In a couple of years time when interest rates are at a more normal 5% ish then we will all see whether house prices were cheap and whether the slow hissing sound of the property bust has finally ended.Mortgage advice - trusted broker

Monday, December 23, 2013

I'm a great believer in free markets and minimal intervention. I've seen all too often the law of unintended consequences as regulation in one way results in all kinds of often perverseness and unintended results else where (think financial Gaia Theory). Don't forget banks were regulated before the biggest financial bust in history.

Rental regulation?
However, it does make you wonder sometimes when you see some of the rents landlords are trying to charge in the overheated South East. I came across this 2 bed maisonette in Thornton Heath on the Streatham High Road. Jokingly its called Heath House. Now this ain't swanky London and the landlord is laughingly asking almost 5 grand a month for it. In Nottingham and I"m guessing and in most provincial cities outside London a place like this would be likely to attract a rent of just over a tenth of this. I'm dead against rent regulation of any sort but when you see landlords trying to charge rents like this you do wonder.

Is this overcharging on the rent or just an opportunistic landlord chancing his/her arm to bag a desperate tenant?

It will be interesting to see how 2014 plays out.
It all seems pretty positive in terms of property prices. I can't see falls happening, but neither can I see many areas seeing the massive growth that some estate agents are calling. The BOE seem ready to use with measures to prevent a property bubble happening.

If I was to wave my finger in the air to catch which way the wind was blowing, I'd pluck 5% growth as my prediction. We'll have to wait to next December to see who guessed best.

As regards any increases in interest rates, I don't believe the BOE will be ready to put our fragile recovery at risk during 2014. Their recent report on the Financial position of British households makes a clear argument against any rate rises. I think landlords should be safe in that respect for another year - big sigh of relief.

My feelings are we should enjoy our festive break feeling optimistic about the coming year.

Have fun, relax and just hope that the twelve days of Christmas remain peaceful.

Let's hope we don't hear a chorus of two boilers broken, ten pipes a leaking, or a partridge stuck in a sanuflo.

Wednesday, December 18, 2013

Office for National Statistics data showed average property prices now at £257,000. London was obviously the most expensive region at £437,000, having seen growth of 12 percent. In comparison, the North East managed growth of just 2.4 percent, leaving the regions average price at £148,000.

The average prices of a home in Wales, Northern Ireland and Scotland are £164,000, £129,000 and £184,000 respectively.

These regional gaps will surely only get wider over the coming decades. I can't see any reason for them not to - can you?

The number of overseas landlords investing in UK property is now numbers more than two million according to data from accountancy firm UHY Hacker Young.

This reflects an increase of 39 percent data, which refer to individual buyers rather than corporate property investments, shows a 39 per cent increase in overseas landlords buying-to-let in the UK over the 5 year period to March 2012.

This data includes both British citizens living abroad and foreign nationals.citizens who live abroad.

Mark Giddens, head of private client services at UHY Hacker Young commented

“UK property is seen globally as a safe haven from the effects of a financial crash or from national governments’ interference in the assets of private individuals.”

The number of properties worth more than a million pounds has gone up by a third in the past year following the boom in house prices. Four hundred thousand properties in the UK are now estimated to be worth more than a million. Unsurprisingly, three fifths of these are situated in London.

We would like to congratulate Alan Boswell Insurance Brokers for picking up the award in the best supplier category at the Landlord and Letting Awards 2013. They are a fairly level headed lot and I'm sure they are back to their desks sorting out landlord insurance for the thousands of landlords across the UK who regularly use their services.

Tuesday, December 17, 2013

Anybody who was a regular watcher of Dragon's Den will remember the brooding presence of James Caan. It seems that the ex-Dragon Mr Caan through his investment vehicle thinks that there is mileage in the online estate agency market. His investment firm Hamilton Bradshaw Real Estate (HBRE) has just backed the firm established by high street estate agent Russell Quirk. To view his views on eMoov then follow this link.

Disruptive
Whilst this 'disruptive' internet business and lower agency fees sounds great in theory we have seen time after time similar businesses fail. Why? The reality is property is all about the face to face. Most people get scared buying and selling a pair of jeans on ebay. To do the same with your life's biggest asset without any expert guidance is too much for the vast majority of buyers and sellers. In this respect the model is far from outmoded...it just does what most of us want from it.

Poor timing...
Added to the above is the fact that the aggregators don't like these strange online estate agent model who threaten their regular clients and income stream. With Zoopla looking to bar the online estate agents; one has to question the timing of this investment. Without the oxygen provided by the likes of Rightmove and Zoopla, eMoov could just be another one of the Internets' footnotes of failed business ideas.

Monday, December 16, 2013

The inventory for properties for sale has slumped since a peak in 2007 according to property portal Home.

Overall the volume of property for sale is now 38% lower than it was at the peak of the market in 2007. There are currently 481,000 properties for sale compared to 771,000 in late 2007.

More importantly, new property listings have reduced too. The monthly flow of new property has fallen 16.9% in the last year and 61% since 2007. Unsurprisingly, the biggest fall in stock is in the 'over heating' London market where the volume of new property has dropped 28.5% in the last year and a massive 74% since 2007.

All this means that landlords are competing with private buyers for less property. In the hotspots this is likely to drive selling prices upwards. Grabbing a potential buy-to-let bargain in 2014 could be about to get more difficult unless supply improves.

Rightmove predict property prices to rise by as much as 8 per cent next year.

The predicted rise a testament to a lack of supply.

"There's a listing gap to fill. While sales transactions are up 13% so far in 2013, the number of newly listed properties is only up by 2%," said Miles Shipside.

The website report a 5.4% rise in prices this year, with the average asking price for December slipping back to £241,455 thanks to the typical winter slowdown.

The site predicts the market will remain divided. In the south the prosperous towns and cities such as Bath, Bristol, Cambridge and Oxford will do best, and in the north, Manchester, Leeds and York should out perform other regions.

London and the South East will continue to do well, because of high demand and supply shortages.

Zoopla has announced that from the start of next year it will only accept listings from bona-fide estate or letting agents, offering a full range of agency services. The new guidelines will stop a number of aggregator sites from getting landlord rental properties advertised on Zoopla for a single fixed fee.

As to which aggregator sites they are, we will have to wait and see which manage to jump the hurdles to meet the sites shift in criteria.

Alex Chesterman, Founder & CEO of Zoopla Property Group said: “Our aim is to provide a high quality service to the users of our websites in terms of both content and experience. We believe that can currently only be achieved through professional agents preparing listing details and intermediating consumer enquiries. We will not accept listings from private vendors or landlords or pure aggregators of either.”

As we approach the tax deadline of the 31st January all our thoughts turn to tax tax tax and minimising our declarable rental profits. The only game in town is maximising your allowable deductions. The top 5 tax deductions on average by value are:

These include a 3.99% variable discount for term up to 75% LTV with a £995 arrangement fee, and a 4.95% 2 year variable discount up to 80% LTV with no arrangement fee. Both products have a free valuation for properties valued up to £250,000 or £240 contribution if over £250,000.

An Ipswich landlord, Kim has been fined £4,000 for not complying with a series of improvement notices issued by Ipswich Borough Council. The notices were for having an inadequate heating system and insulation - which all seems a bit harsh - Read more on the fined Ipswich landlord.

George McAlister, a Darlington landlord has been made to pay out £1,500 in court fees and fines for failing to licence his HMO rental property. Council officials also assessed fire precautions at the property were inadequate. - Read more on the fined Darlington landlord.

Curtis Betteridge, a Teignbridge landlord has been fined £4,000 after failing to comply with an improvement notice placed by Teignbridge Council. The landlord failed to make changes to the rental property to meet fire and safety regulations. - Read more on the fined Devon landlord.

Debt charity the Money Advice
Trust have raised concerns over the growing level of those in rent arrears coming to them for advice.

There debt advice line has seen the percentage of callers with issues over rent arrears growing from 6.3% of callers in 2010 just 6.3 per cent to 12.3 per cent in 2013.

Their Chief Executive, Joanna Elson, commented: “The long-term
trend for rising rent prices is clear and its impact on the debt landscape
is significant. Rent arrears are now the fastest growing debt problem we
help people with at National Debtline, and we are in danger of falling into
a rent debt crisis."

Wednesday, December 11, 2013

Southwark Council has moved a step closer to mandatory licensing for landlords by setting out minimum standards yesterday.

The standard includes services provided to tenants, repairs and maintenance, and the condition of the property.

Mark Williams, deputy cabinet member for PRS, said: ‘We want to drive standards up across the borough by encouraging landlords to meet a certain standard, and over time we will make that a requirement of operating in the borough, through a new licensing scheme."

Tuesday, December 10, 2013

Bob Pannell, the chief economist for the Council of Mortgage Lending predicts that mortgage lending will rise from £10billion to £15bn in 2014, then increase again to £20bn during 2015.

He commented "While this would mark a climb out of the sub-£10bn doldrums, where the market has languished since the credit crunch, it does nevertheless represent a rather muted position,"

He went on to say "We think there are good grounds to be optimistic that the vast majority of households will cope with a slow but certain transition to more normal interest rates. This seems to be the game-plan which the Bank of England has in mind."

UK private landlords are being urged by councils to police their tenants’ behaviour in a bid to allay the financial burden of handling noise and waste queries currently inflicted on their own budgets.

A recent meeting took place in Liverpool, where 20 landlords involved in an accreditation scheme were ‘reminded’ of their obligatory duties in helping to prevent complications.

In a warning to the group, the council told them officers had been called out to over 600 visits this year due to complaints from neighbours about house in multiple occupation (HMO) issues. Yet the problem with housing legislation is that it only applies to what happens on a landlord’s direct premises – meaning that occurrences outside their property are deemed invalid.

Cabinet member for housing, Councillor Ann O’Byrne, has requested that landlords reference check their tenants in an attempt to reduce the risk of renting out their property to someone likely to behave in an anti-social manner.

“Anti-social behaviour causes misery for neighbours and damages communities,” she said. “We are looking to landlords to work with us in tackling this issue. We expect all landlords, to take reasonable action to prevent and, where necessary, to remedy anti-social behaviour.

“Most landlords are responsible and want to work for the good of their tenants and the wider community. We will support them in carrying out their responsibilities so that together we can stop anti-social behaviour.”

Coventry is also debating this new move, with councillors looking to article 4 directions to limit new student HMOs – whilst councillors in York are to assess the impact article 4 directions rules have made 12 months on.

York’s direction prevents over 20 per cent of properties in any neighbourhood and 10 per cent on homes within any 100 metre radius of a street from becoming an HMO or a shared property housing more than three tenants.

With the majority of private landlords being called upon to conduct stringent tenancy checks as well as keep a watchful eye over the behaviour of their tenants, it’s imperative that landlords receive the right support in order to help them deal with any anti-social instances. For help in dealing with nightmare tenants, speak to an advisor at Total Landlord Insurance on 0800 63 43 880 – and enjoy a dream tenancy today.